Fed Division and Geopolitical Tensions Offset Record AI Spending by Tech Giants

Wall Street futures traded mixed on Thursday as investors navigated a complex landscape of corporate earnings, central bank policy, and geopolitical instability. While Nasdaq 100 futures edged up 0.1%, Dow futures declined 0.6%, reflecting a market torn between growth optimism and systemic macro risks. The 'Magnificent 7' revealed a staggering commitment to artificial intelligence, with Alphabet, Amazon, Microsoft, and Meta spending a combined $130.65 billion in the first quarter—a 71% year-over-year increase. Alphabet and Amazon saw strong cloud revenue growth, though Meta's shares dipped after the company raised its 2026 capital expenditure guidance to a range of $125 billion to $145 billion. In Washington, the Federal Reserve maintained interest rates between 3.5% and 3.75%. However, the decision revealed significant internal friction, with four FOMC members dissenting—the most divided the board has been since the early 1990s. Chair Jerome Powell further surprised markets by announcing he will remain on the board past his May term, citing concerns over political and legal attacks on the central bank's independence. Simultaneously, Brent crude prices surged to their highest levels since February. This spike follows reports that Donald Trump is receiving briefings on potential military action against Iran, shifting the oil market's focus toward immediate supply disruptions in the Persian Gulf. Global attention now shifts to the European Central Bank and the Bank of England. While both are expected to hold rates, rising energy costs are leading some analysts to price in a potential ECB hike in June, while the BoE balances slower growth against persistent inflation pressures.